Biodiesel allotment decree was awaited by industry
Indonesia had actually prepared to introduce greater biodiesel mix on Jan. 1
Palm oil criteria agreement rose 1% after previous fall
Government goes for 50% biodiesel mix in 2026
(Recasts with energy minister's remark)
By Bernadette Christina and Fransiska Nangoy
JAKARTA, Jan 3 (Reuters) - Indonesia Energy and Mineral Resources Minister signed a decree on Friday allocating 15.6 million kilolitres (KL) of biodiesel for 2025 distribution, while offering the market till completion of next month to adapt to the higher level of the fuel in the mix.
Indonesia, the world's biggest exporter of palm oil, had actually prepared to release the compulsory requirement of 40% palm oil fuel in biodiesel on Jan. 1, up from 35% now.
"The ministerial policy has been signed," the minister Bahlil Lahadalia informed press reporters, adding the federal government was working to increase the obligatory biodiesel mix to 50% next year.
Eniya Listiani Dewi, a ministry senior official, said biodiesel manufacturers and fuel retailers will be given until Feb. 28 to adjust to the B40 mix. She said the hold-up was because of technical obstacles connected to aids for the fuel.
The non-implementation on Jan. 1. had actually led to a 2.6% drop in the Malaysian palm oil standard agreement on Thursday. On Friday, it recovered by around 1%.
Fuel merchants and biodiesel producers had actually said they were not able to prepare agreements for biodiesel circulation without the decree.
The biodiesel allotment for 2025 indicated a boost from 2024's approximated biodiesel usage of 12.98 KL, ministry data revealed on Friday.
Of the total allowance for this year, 7.55 million KL is for the public service responsibility (PSO), which covers sectors such as public transport, whose sales will be subsidised by the country's palm oil fund.
"The remaining allowances will be offered at market value. The non-PSO allotment is set at 8.07 million KL," Bahlil said, including the fund could not subsidise the price gap between the palm oil and nonrenewable fuel sources for the total allocation.
BPDPKS, the company in charge of gathering and managing the palm oil funds, approximated in November B40 would need a 68% aid increase.
To help fund that, Indonesia prepares to increase its export levy for crude palm oil (CPO) to 10% from the present 7.5%, however for that to take place, another is required. (Reporting by Bernadette Christina Munthe, Fransiska Nangoy, Dewi Kurniawati
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Indonesia Signs 15.6 Mln Kilolitres Biodiesel Allocation For 2025
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